Monday, May 09, 2011

Lesson Learned

Prince, K-State settle lawsuit for $1.65 million

By John Taylor

May 6, 2011

During the time when the legal dispute between Kansas State and former head coach Ron Prince had become particularly heated back in August of 2009, we wrote that one of these days the school will learn that you neither mess with Mother Nature nor attempt to cheat the clients of Neil Cornrich.

Nearly two years later, the school’s bank account has been quoted as saying “lesson learned”.

As a thumbnail background for those unfamiliar with the Prince situation, he was fired by Kansas State in early November of 2008 and replaced by Bill Snyder. In May of 2009, the school filed a lawsuit against Prince in which it claimed that the former head coach entered into what was essentially an illegal “secret agreement” with the former athletic director, an agreement that entitled Prince to $3.2 million in deferred compensation. Prince, per the agreement, was slated to receive that compensation between 2015 and 2020.

It was announced today, however, that those legal proceedings are over and Prince got his in the here and now. Well, technically, he got half of his.

In a release issued by NC Sports this evening, it was announced that Prince and Kansas State have reached a settlement agreement in the amount of $1.65 million. That’s, of course, $1.55 million less than the number contained in the contractual agreement between Prince and ex-AD Bob Krause; however, it’s also $1.65 million more than the school claimed their former coach was owed.

Perhaps most importantly — yes, even more important than the seven-figure sum — the statement issued by the firm which represents Prince stated that the university has “also taken the extraordinary step of absolving Coach Prince of any wrongdoing whatsoever.” In May of 2009, it was alleged by the school that some sort of ethical duty had been breached by negotiating with Krause without university lawyers present.

Here’s the entire text of the release regarding Prince, who’s currently the assistant offensive line coach for the NFL’s Indianapolis Colts:

Coach Ron Prince has agreed to a $1.65 million settlement with Kansas State University (“KSU”) and the Intercollegiate Athletic Council of Kansas State University, Inc. (“IAC”). While it is unfortunate that the decisions of prior administrators and a current member of its Office of General Counsel caused KSU to initiate this lawsuit and incur unnecessary and costly legal fees, Coach Prince is pleased that KSU and IAC have now chosen to do what is right and honor their obligations.

As part of the settlement, KSU and IAC have also taken the extraordinary step of absolving Coach Prince of any wrongdoing whatsoever by noting: “Neither the University nor K-State Athletics contends or believes that, in negotiating his employment agreement or the MOU, Coach Prince engaged in any wrongful or unethical conduct.”

In addition to this concession, the settlement is financially advantageous to Coach Prince. Under the terms of the contract Coach Prince had previously entered into with KSU and IAC, he was entitled to deferred termination payments totaling $3.2 million. However, Coach Prince was not scheduled to receive any portion of that sum for almost five more years, and the full amount would not have been completely paid until December 31, 2020.

Consequently, discounted to present value, the $1.65 million settlement figure essentially represents an agreement by KSU and IAC to pay Coach Prince almost the entire $3.2 million termination payment. Coach Prince will receive these funds upfront and almost nine years earlier than they were originally due, providing a significant financial advantage over the deferred payments. In addition, Coach Prince will avoid trial and litigation fees. As a result, the settlement is a complete validation of Coach Prince’s claim that the contract he signed with KSU and IAC was negotiated in good faith in an openly disclosed format, mutually agreed upon, and legally binding.

To this point, KSU and IAC had argued that the $3.2 million termination payment was part of a “secret agreement,” and that Coach Prince was therefore owed nothing. However, even with the ability to try the case in front of a hometown jury, KSU and IAC instead agreed to settle the case for nearly the full amount – a total vindication of Coach Prince and a firm indication that their legal position had been exposed as one completely without merit. Moreover, the settlement sets a clear precedent that institutions of higher learning will be held responsible for the contracts they have signed and the promises they have made to their employees.

Appreciative of KSU’s willingness to structure the settlement in such a favorable manner, as well as its decision to absolve him of any wrongdoing, Coach Prince is pleased that all parties can finally put this matter behind them.

Popular Posts